5. Retail Flashcards
What are the different factors within the retail sector
- Supermarkets
- Deep discounters
- Convenience Retailers
- Specialist wine retailers
- Hybrids
- Online retailing
- Global travel retail
- Wine investment Companies
What are the advantages of selling wine in supermarkets
- Largest market share in wine sale = large volumes of wine
- Market exposure
- When buying directly, no intermediary costs
- Private label wines promote customer loyalty
- Expert winemaker employed by supermarkets ensure quality
What are the disadvantages of selling in supermarkets
- Supply exceeds demand = extreme negotiating power = lower profits
- Additional fees for desirable product placement and marketing
- Contracts regarding quality = possibility to be left with wine that can not be sold
What type of wine is sold at supermarkets
- Well-known brands like Jacob’s Creek and Barefoot help attract customers to buy wine
- Well-known regions and grape varieties, in a style that appeals to wide public
- In wine-producing countries local wines will dominate
- In Whole Foods (premium), wines from artisan producers with their own label will appeal consumers with interest in wine
- Own-Brand wines (e.g Sainsbury’s Taste the Difference in UK)
- Private label wines
Give examples of Deep Discounters
- Germany: Lidl and Aldi
- Denmark: Netto
- USA: Trader Joe
How do deep discounters keep their prices low
- Relying on volume of sales rather than profit margin
- Basic shops
- Away from prime locations for lower rent
- Limited product range
- Private label products
- No major brands with large marketing budget
- Buying without intermediary
Give an example of a deep discounter private label wine
Charles Shaw “Two Buck Chuck” for Trader Joe
How much people buy wine from deep discounters
In the UK
2012: 23%
2018: 37%
What are convenience retailers
Smaller shops, open for longer (sometimes 24h). Located near where people live. Sometimes independent, sometimes franchise
What are the advantages of convenience retailers
- Open for longer (sometimes 24h)
- Closer to where people live
What are the disadvantages of convenience retailers
- Usually smaller
- Usually more expensive
- In proportion costs are higher: rent, more staff
- When franchise, operator has to pay a fee to owner
Give examples of convencience retailers
Independently:
- In India they make up a big part of the market
Franchise:
- Spar in 34 countries
What are specialist wine retailers
- Sometimes combined with premium spirits and beer
- Sometimes combined with artisan products such as cheese and delicatessen
- Sometimes specialised in particular region/country
What are the advantages of specialist wine retailers
- Attractive for lesser known/smaller producers
- High involvement consumers = higher prices
- Higher prices = higher producer margin
- More personal service for regulars
- Hand sell: story, information, food and wine pairing
- Tastings, educational classes, etc
What are the disadvantages of specialist wine retailers
- More expensive
Give examples of specialist wine retailers
Organic, biodynamic, natural wines:
- La cave de Papilles Paris
Fine wine retailers (premium and primeur):
- Hedonism UK
What are hybrids
Specialist wine retailers with a bar area, serving food like cheese and delicatessen, and sometimes substantial dishes
What are the advantages of hybrids
- Consumers can try wine before purchase
- Regurlarly changing wine by glass showcases also lesser known regions/varieties
What are the disadvantages of hybrids
- May need to stay open longer
- Additional staff
- Bureaucracy
Define “Bricks-and-mortar” retailers
Retailers like supermarkets and specialist wine retailers, who offer online and offline sales combined
How much sales go through online retailing
In China 20%
In USA 2%
What are the advantages of online retailing
- Larger customer base
- No need for expensive shops
- Warehouses outside of centre
- Additional information available
- Offer similar suggestions
- Read reviews of customers
What are the disadvantages of online retailing
- Delivery costs (solution: click and collect)
- Risk during transit
- Customers expect quick delivery
- Need for convenient website
- Need for distinctive website
- Technical support in case of crash
- Need to upload additional information
- Update stock
Give examples of online retailers
- Laithwaite’s UK
- wine9.com China
- Pinjiu.com China
- New York Times Wine Club
- Sunday Times Wine Club
- Amazon.com
